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FOI201800298-The-Sheffield-To-Rotherham-Tram-Train-Project-Investigation.Pdf Our vision is to help the nation spend wisely. Our public audit perspective helps Parliament hold government to account and improve public services. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £734 million in 2016. This report investigates the cost increases and delays on the Sheffield to Rotherham tram‑train project, and explains the roles of the Department for Transport and Network Rail in implementing the project. Investigations We conduct investigations to establish the underlying facts in circumstances where concerns have been raised with us, or in response to intelligence that we have gathered through our wider work. © National Audit Office 2017 The material featured in this document is subject to National Audit Office (NAO) copyright. The material may be copied or reproduced for non‑commercial purposes only, namely reproduction for research, private study or for limited internal circulation within an organisation for the purpose of review. Copying for non‑commercial purposes is subject to the material being accompanied by a sufficient acknowledgement, reproduced accurately, and not being used in a misleading context. To reproduce NAO copyright material for any other use, you must contact [email protected]. Please tell us who you are, the organisation you represent (if any) and how and why you wish to use our material. Please include your full contact details: name, address, telephone number and email. Please note that the material featured in this document may not be reproduced for commercial gain without the NAO’s express and direct permission and that the NAO reserves its right to pursue copyright infringement proceedings against individuals or companies who reproduce material for commercial gain without our permission. Links to external websites were valid at the time of publication of this report. The National Audit Office is not responsible for the future validity of the links. 11522 07/17 NAO Contents Key facts 4 What this investigation is about 5 Summary 7 Part One The introduction of the scheme 10 Part Two The cost increases during design and implementation 15 Part Three Plans for completing the project 22 Appendix One Our investigative approach 25 Appendix Two Project chronology 26 Appendix Three The technical challenges tested in the The National Audit Office study team tram‑train pilot project 28 consisted of: Richard Baynham, Grace Williams, Alex Black and Liam Blanc, under the direction of Rebecca Sheeran. This report can be found on the National Audit Office website at www.nao.org.uk For further information about the National Audit Office please contact: National Audit Office Press Office 157–197 Buckingham Palace Road Victoria London SW1W 9SP Tel: 020 7798 7400 Enquiries: www.nao.org.uk/contact‑us Website: www.nao.org.uk Twitter: @NAOorguk 4 Key facts The Sheffield to Rotherham tram‑train project: investigation into the modification of the national rail network Key facts 401% May 2018 2 increase in the anticipated current expected completion date the number of times the fi nal cost of Network Rail’s for Network Rail’s modifi cation Department for Transport modifi cation works, compared works, more than two years later assessed whether to continue with the budget agreed in than originally expected. with the project May 2012 £15 million the budget agreed between the Department for Transport and Network Rail in May 2012. Network Rail initially estimated costs of £18.7 million but thought effi ciency savings were possible £75.1 million Network Rail’s anticipated fi nal costs for the national rail modifi cation works, as at June 2017 2.5 years the expected delay in completing the tram‑train scheme. The Department originally expected the scheme would be completed by December 2015. In October 2013, Network Rail reset the project timetable following integration of its project with the tram‑train vehicle procurement project. It expected to complete its works by March 2016. 1.0 the benefi t–cost ratio for the programme when it was approved in May 2012. The business case was based on benefi ts to local transport users. The Department approved the project on the basis of the ‘strategic’ business case. Wider industry and economic benefi ts were considered ‘very uncertain’ 0.31 the Department’s estimated benefi t–cost ratio – based on the local public transport case – as at October 2016 The Sheffield to Rotherham tram‑train project: investigation into the modification of the national rail network What this investigation is about 5 What this investigation is about 1 The Sheffield to Rotherham tram‑train scheme is intended to provide the first transport service in the UK to use both the street tramway and national rail network. The Department identified that tram‑train schemes offered the potential to reduce the cost of transport services and create growth by improving access to city centres, but that such schemes could pose complex technical and delivery challenges. 2 In 2009, the Department for Transport (the Department) announced a pilot project to trial the technology in the UK and assess the potential to extend it to other cities. It wanted to test the operational issues and costs of running tram‑trains from the national rail system onto the tramway, and to develop new industry standards. This was the first project of its kind in the UK and required Network Rail to test and secure industry approvals for a number of technical components, including track, signalling, and power configurations. 3 The Sheffield to Rotherham programme involves modifying the existing national rail infrastructure, modifying the tram network and depot, and purchasing vehicles capable of operating on both networks. Three main bodies are involved: • Network Rail is responsible for the infrastructure project to modify the national rail network to allow tram‑trains to run. It designed and is managing the works to modify the national rail tracks, signalling and stations. • The Department approved the tram‑train project and is responsible for overseeing the project and setting the requirements for the tram‑train service. It provided part of the funding for Network Rail’s works. It also provided most of the funding to purchase the tram‑train vehicles and modify the tram network, via two capital grants. • South Yorkshire Passenger Transport Executive is responsible for modifying the tram network and buying the new tram‑train vehicles. It also provided part of the funding to buy the vehicles and modify the tram network. Stagecoach Supertram, which holds the concession to operate the tram network, is preparing to introduce the new vehicles on the existing tram system and will work with Network Rail to introduce the vehicles across the whole tram‑train route when it becomes available. Our report focuses on the modification of the national rail network, which the Department part‑funded and Network Rail managed. 6 What this investigation is about The Sheffield to Rotherham tram‑train project: investigation into the modification of the national rail network 4 In May 2012, when ministers approved the programme, the Department expected Network Rail’s modification of the national rail network to cost £18.7 million and the tram‑train scheme to be completed by December 2015. By December 2016, the cost of these works had quadrupled to £75.1 million and Network Rail’s project is now expected to be completed in May 2018. This investigation covers: • the Department’s decision to approve the project; • cost increases on the national rail infrastructure works and the Department’s decisions to continue the project; and • plans for realising the project’s aims. This investigation does not look at the modifications to the tram network or the procurement and testing of the tram‑train vehicles. These are managed by bodies which fall outside the National Audit Office’s remit. 5 The report is based on documents received from the Department and Network Rail, interviews with officials and information in the public domain. Our methodology is summarised in Appendix One. The Sheffield to Rotherham tram‑train project: investigation into the modification of the national rail network Summary 7 Summary Key findings 1 The pilot project aimed to test the viability of operating tram-trains in the UK. The Department for Transport’s (the Department) approval was based on the wider strategic benefits of rolling out schemes to other cities. The Department wanted to introduce a new service in the UK to reinvigorate under‑used rail lines, better penetrate city centre markets and release capacity at mainline railway stations. The Department and Network Rail agreed that a pilot project was the best way to test whether the tramway technology could be extended onto national rail lines, and to develop new industry standards.1 The project’s aims were to test the costs and operational issues of the tram‑train technology, and capture this information to assist promoters of similar schemes (paragraphs 1.3 to 1.6). 2 The Department accepted the project’s wider financial benefits were uncertain. The business case for the proposed tram‑train scheme was based on the benefits to local transport users, such as reduced journey times. The benefit–cost ratio (BCR) of 1.0 fell into the Department’s ‘low’ value‑for‑money category, using its standard criteria for assessing transport projects.2 The Department considered the wider benefits of the pilot, such as lower industry costs and economic benefits, to be ‘very uncertain’.
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